Hawaii State Tax Rate

Hawaii has one of the most complex and highest-taxed systems in the U.S., combining a graduated personal income tax with a unique General Excise Tax (GET) that functions much like a sales tax.

As of 2026, individual income tax rates range from 1.4% to 11%, while most transactions are subject to a 4% GET, which can increase to 4.5% or more when county surcharges apply.

In addition, Hawaii imposes graduated corporate income taxes, taxes capital gains, and maintains exceptionally low property tax rates, especially for owner-occupied homes.

Key Hawaii Tax Rates and How They Apply

Individual Income Tax

• Graduated rates from 1.4% to 11%
• Top rate applies to high earners
• Income brackets are reached at lower income levels than in many other states

Example: A single filer may reach an 8.25% marginal rate at a much lower income level than a comparable taxpayer in California or New York.

Tip: Because brackets escalate quickly, retirement contributions, itemized deductions, and tax credits can significantly reduce Hawaii’s taxable income.

General Excise Tax (GET)

• 4% statewide rate
• Applies to most business activities—not just retail sales
• Often passed on to consumers as a line-item charge

Important difference: Unlike a traditional sales tax, the GET is legally paid by the business, even though consumers usually see it added to the bill.

County GET Surcharges

• Counties including Honolulu (Oʻahu), Hawaiʻi, Kauaʻi, and Maui impose an additional 0.5% surcharge
• Brings the total rate to 4.5% in those areas

Example:
A $1,000 purchase on Oʻahu typically includes $45 in GET.

Tip:
Some transactions (rentals, services, professional fees) are taxed under GET even when sales tax would not apply in other states.

Corporate Income Tax

• Graduated rates from 4.4% to 6.4%
• Applies primarily to C corporations

Tip:
Pass-through entities (S corporations and partnerships) usually pass income through to owners, who then pay Hawaii’s individual income tax rates.

Capital Gains Tax

• Capital gains are taxed as ordinary income
• Effective rate can reach 7.25% for higher-income taxpayers

Example:
Selling investment property or stocks may trigger both federal capital gains tax and Hawaii income tax. Timing asset sales across tax years can sometimes reduce exposure to higher brackets.

Property Tax

• 0.32% effective rate on owner-occupied housing
• Among the lowest property tax rates in the nation

Example:
A home valued at $900,000 may have a property tax bill of roughly $2,880, depending on county classifications and exemptions.

Tip:
Owner-occupant exemptions and senior exemptions can further lower property taxes.

Common Usage Contexts

Consumer Purchases

Most purchases include a 4%–4.5% tax, even on services such as repairs, professional services, and rentals.

Business Operations

• 0.5% GET typically applies to wholesaling
• 4% GET applies to retail and most services

Tip:
Because GET applies to gross receipts, businesses may owe tax even when operating at a loss.

Income Reporting

Hawaii residents file returns using a multi-bracket progressive system, similar to the federal tax structure but with higher top rates.

Recommendation: File Hawaii Taxes Electronically

Given Hawaii’s layered tax system, electronic filing (e-file) is strongly recommended for both individuals and businesses.

Benefits of e-filing include:

• Faster refunds with direct deposit
• Fewer errors when calculating multiple tax brackets
• Accurate reporting of GET, credits, and deductions
• Immediate confirmation that your return was received
• Secure digital records for future reference

Best practice: File your federal and Hawaii state returns electronically, verify county GET rates carefully, and select direct deposit to receive any refund as quickly as possible.